Gross receipts generated from the following types of business activities are subject to the Phoenix Transaction Privilege and Use Tax. For more information, see Chapter 14 of the
Phoenix City Code or click a link below.
Advertising / State Business Code 018 (City ST Code 01) - Section 14-405
-the activity of advertising by billboards, direct mail, radio, television, or any other means. All delivery or disseminating of information directly to the public for consideration shall be considered advertising.
Amusements / State Business Code 012 (City ST Code 12) - Section 14-410
-the operating of movies, shows, exhibitions, concerts, carnivals, circuses, bowling alleys, skating rinks, tennis courts, golf courses, video games, pinball machines, dance halls, sports events, batting and driving ranges, health spas, fitness centers, and etc. Any business charging admission for exhibition, amusement, or entertainment is taxable under this business activity.
Construction Contracting (State Business Codes 015, 016, 037) - Sections 14-415, 14-416, 14-417, respectively
-the construction of real property. A business/person may not meet the qualifications to be licensed as a contractor by the Arizona Registrar of Contractors but would still be subject to the tax under the contracting business classification. Contracting includes the activities of developers, general contractors, contractors, subcontractors, construction managers (generally, State Business Code 015),
speculative builders (State Business Code 016), and owner-builders (State Business Code 037). See the Arizona Department of Revenue’s webpage for information on recent statutory changes that affect the Construction Contracting business activity.
Jet Fuel Sales / State Business Code 049 (City ST Code 49) - Section 14-422
-the business of selling jet fuel.
Job Printing / State Business Code 010 (City ST Code 10) - Section 14-425
-the activity of copying or reproducing an article by any means, process, or method. This includes engraving, embossing, copying, micrographics, and photo reproduction.
Manufactured Buildings / State Business Code 027 (City ST Code 47) - Section 14-427
-the business of selling manufactured buildings within the City, including the site preparation, moving, and set-up charges. Manufactured buildings are factory built homes and buildings as defined in A.R.S. § Section 42-5075(R)(4). This business activity occurs at the location of the seller's business.
Timbering/Extraction / State Business Code 020 (City ST Code 03) - Section 14-430
-a business engaged in felling, producing, or preparing timber for sale, or engaged in extracting, refining, or producing any oil or gas for sale.
Mining / State Business Code 019 (City ST Code 19) - Section 14-432
-any business engaged in mining, smelting, or producing minerals or mineral products for sale. This activity does not include the extraction, removal, or production of sand, gravel, or rock.
Publishing / State Business Code 009 (City ST Code 09) - Section 14-435
-the publication of newspapers, magazines, or other periodicals within the City. Included in taxable revenue is subscription and advertising income, based on circulation of the published item within the City.
Rental, leasing, and licensing for use of real property / 213, 313 (City ST Code 13 & 18) - Section 14-445, Section 14-446
-the leasing, licensing for use or renting of any real property within the City. Included as real property are land, rights-of-way, commercial building(s), office space, storage facilities, apartments, homes or other, and etc. This classification includes
Commercial / State Business Code 213 and 313 (City ST Code 13) The Arizona Department of Revenue (ADOR) informs property management companies and residential rental owners of upcoming changes to the Arizona tax law for residential rental properties. Starting January 1, 2025, residential rental property owners should no longer collect and remit any city transaction privilege tax (TPT) on the income derived from long-term lodging stays of 30 days or more to ADOR. (Laws 2023, Chapter 204 and A.R.S. § 42-6004 (H)). For more information on this change and frequently asked questions, please visit https://azdor.gov/business/transaction-privilege-tax/residential-rental-guidelines. If you need further assistance, please call ADOR customer care line at (602) 255-3381.
-the business activity of any hotel, motel, apartment, vacation rental ,or individual engaged in charging for lodging space to any person for 29 days or less. Click here for the
Hotel/Motel Matrix.
-this business activity includes leasing, licensing for use or renting equipment, automobiles, tools, furniture, coin-operated laundromats or carwashes, videos, or any other tangible personal property.
-any business where articles of food, drink, or condiment are prepared or served to patrons for consumption on or off the premises. This activity includes bars, lounges, restaurants, caterers, street and mobile vendors, and "fast food" establishments.
Retail Sales / State Business Codes 017, 162, 164, 165, 203, 367, 420, 605, 625, 626, 628, 652, 668, 682, 683, 684, 685 (City ST Code 17 & 33) - Section 14-460, A.R.S. §42-5043
-the sale of any tangible personal property, including items such as automobiles, furniture, clothing, equipment, and etc., under which a two-level tax structure is imposed upon as follows:
RETAIL SALES BUSINESS ACTIVITY
Retail Sales, Level 1 (State Business Code 017)
The gross income from the retail sale/purchase of a single item of tangible personal property, whose value is equal to or less than $13,886 before taxes, add-ons, or sales price adjustments, must be reported at the 2.3 percent tax rate. When the gross income from the retail sale/purchase of the single item of tangible personal property exceeds $13,886 in value before taxes, add-ons, or sales price adjustments, the 2.3 percent tax rate will apply to the first $13,886 in value and be reported under this business code.
Retail Sales, Level 2 (NEW State Business Code
164)
When the gross income from the retail sale/purchase of a single item of tangible personal property exceeds $13,886 in value before taxes, add-ons, or sales price adjustments, the amount that exceeds $13,886 must be reported at the 2.0 percent tax rate under this business code.
MARKETPLACE FACILITATED OR REMOTE RETAIL SALES BUSINESS ACTIVITY
Marketplace Facilitated or Remote Retail Sales, Level 1 (State Business Code 605)
The gross income from the retail sale/purchase of a single item of tangible personal property required to be reported pursuant to A.R.S. §42-5043, whose value is equal to or less than $13,886 before taxes, add-ons, or sales price adjustments, must be reported at the 2.3 percent tax rate. When the gross income from the retail sale/purchase of the single item of tangible personal property exceeds $13,886 in value before taxes, add-ons, or sales price adjustments, the 2.3 percent tax rate will apply to the first $13,886 in value and be reported under this business code.
Marketplace Facilitated or Remote Retail Sales, Level 2 (NEW State Business Code
628)
When the gross income from the retail sale/purchase of a single item of tangible personal property required to be reported pursuant to A.R.S. §42-5043 exceeds $13,886 in value before taxes, add-ons, or sales price adjustments, the amount that exceeds $13,886 must be reported at the 2.0 percent tax rate under this business code.
ADULT USE MARIJUANA RETAIL SALES BUSINESS ACTIVITY
Adult Use Marijuana Retail Sales, Level 1 (State Business Code 420)
The gross income from the retail sale/purchase of a single item of marijuana or marijuana product for adult personal use, whose value is equal to or less than $13,886 before taxes, add-ons, or sales price adjustments, must be reported at the 2.3 percent tax rate. When the gross income from the retail sale/purchase of the single item of marijuana or marijuana product for adult personal use exceeds $13,886 in value before taxes, add-ons, or sales price adjustments, the 2.3 percent tax rate will apply to the first $13,886 in value and be reported under this business code.
Adult Use Marijuana Retail Sales, Level 2 (NEW State Business Code
684)
When the gross income from the retail sale/purchase of a single item of marijuana or marijuana product for adult personal use exceeds $13,886 in value before taxes, add-ons, or sales price adjustments, the amount that exceeds $13,886 must be reported at the 2.0 percent tax rate under this business code.
MEDICAL MARIJUANA RETAIL SALES BUSINESS ACTIVITY
Medical Marijuana Retail Sales, Level 1 (State Business Code 203)
The gross income from the retail sale/purchase of a single item of marijuana or marijuana product as defined in A.R.S. § 36-2801 to treat a registered qualifying patient's medical condition, whose value is equal to or less than $13,886 before taxes, add-ons, or sales price adjustments, must be reported at the 2.3 percent tax rate. When the gross income from the retail sale/purchase of the single item of marijuana or marijuana product to treat a registered qualifying patient's medical condition exceeds $13,886 in value before taxes, add-ons, or sales price adjustments, the 2.3 percent tax rate will apply to the first $13,886 in value and be reported under this business code.
Medical Marijuana Retail Sales, Level 2 (NEW State Business Code
685)
When the gross income from the retail sale/purchase of a single item of marijuana or marijuana product as defined in A.R.S. § 36-2801 to treat a registered qualifying patient's medical condition exceeds $13,886 in value before taxes, add-ons, or sales price adjustments, the amount that exceeds $13,886 must be reported at the 2.0 percent tax rate under this business code.
Sales of Food for Home Consumption / State Business Code 062 (City ST Code 30) - Section 14-462
-retail sale of any items intended for human consumption as defined by the rules and regulations adopted by the Arizona Department of Revenue. Food does not include alcoholic beverages or tobacco. Effective March 31, 2015, the tax rate for the Sales of Food for Home Consumption business activity was decreased to a zero percent rate (0%).
-any service or activity connected with transmission over a communication channel. This activity includes telephone, telegraph, cable TV, computer interface, internet and facsimile services.
Transporting for Hire / State Business Code 006 (City ST Code 06 - Section 14-475)
-the transport of persons or property by railroad, the transport of oil or gas through a pipeline, or the transporting of property by aircraft. Transporting people by other means for a fee based on mileage is exempt. Transporting people by other means for a fixed fee or hourly rate is taxable under the Rental of Tangible Personal Property business classification.
Utility Services / State Business Code 004 (City ST Code 04) - Section 14-480
-any business producing, providing or furnishing electricity, power, gas, or water to consumers within the City.
Use Tax / State Business Codes 029, 163, 168 (City ST Codes 29, 34, 31 & 35) - Section 14-610, 14-620
USE TAXABLE PURCHASES BUSINESS ACTIVITY
Use Taxable Purchases, Level 1 (State Business Code 029)
The cost for the storage or use in the City of a single item of tangible personal property acquired from a retailer, whose value is equal to or less than $13,886 before taxes, add-ons, or sales price adjustments, must be reported at the 2.3 percent tax rate. When the cost of the single item of tangible personal property exceeds $13,886 in value before taxes, add-ons, or sales price adjustments, the 2.3 percent rate will apply to the first $13,886 in value and be reported under this business code.
Use Taxable Purchases, Level 2 (NEW State Business Code
168)
When the cost for the storage or use in the City of a single item of tangible personal property acquired from a retailer exceeds $13,886 in value before taxes, add-ons, or sales price adjustments, the amount that exceeds $13,886 must be reported at the 2.0 percent tax rate under this business code.
